Consumers who have managed to save during the pandemic will next year, on average, spend a sixth (17.9%) of the amount they have saved.
The finding comes from a KPMG survey of 3,000 UK consumers about their financial confidence and spending intentions for the coming twelve months.
A third of those polled said they will give more consideration to sustainability when making purchases in 2022 than they did in 2021.
When asked what proportion of pandemic savings they will spend in 2022:
- One in five (20%) said 1-10%.
- A further 20% said 11-25%.
- One in ten (10%) said between 26-50%.
- 7% expect to spend over half.
- 17% said they will spend none.
- A quarter (26%) said they haven’t been able to save during the pandemic.
If they managed to save during the pandemic, on average*, consumers expect to spend 17.9% of those pandemic savings in 2022.
The rising price of goods and services was named as the biggest (23%) deterrent to spending savings, followed by higher taxes and household bills (17%), then uncertainty linked to the pandemic (13%).
The survey found a real split in consumer confidence:
- A third (29%) of consumers feel more secure in their financial circumstances for the year ahead than they did in 2021.
- Half (47%) said they felt no more or less secure.
- Whilst a quarter (23%) said they are heading into 2022 feeling less secure.
- 1% preferred not to say.
There was a notable generational difference, with three times as many younger people than older consumers stating they felt more financially secure for 2022 than 2021.
Commenting on the findings, Linda Ellett, Head of Consumer Markets, Leisure and Retail at KPMG UK, said, “This intended spend is much needed for many parts of the economy.
“But consumer confidence is such that even those willing and able to spend, on average won’t spend more than a sixth of their pandemic savings in the coming twelve months.
“Businesses, facing mounting cost pressures, will be hoping that the effectiveness of the booster programme leads to a feel-good factor that increases spending intention further.”
A fifth of consumers said a holiday will be their most expensive purchase in 2022, followed by property at 14% (whether purchase or extension/renovation), whilst one in ten said a household appliance.
Value for money, quality, and convenience, were the top three purchasing considerations for both 2021 and 2022.
A third of consumers said they will consider sustainability more in 2022 than they did when purchasing goods and services in 2021. 60% said they would give the same consideration as in 2021, whilst only 4% said less consideration.
Double the amount of 18–24-year-olds cited sustainability as a purchasing consideration, compared to those aged 45-54 and 65 and over.
Linda Ellett added, “The rise of sustainability as a purchasing consideration, particularly amongst younger consumers, is further evidence that consumer businesses need to ensure that their ESG strategy is walking the walk, not just talking the talk.
“Not only is this vital to the UK’s path to net zero, but there is clear commercial opportunity for those who can convince these consumers that they are worthy of what’s in their wallet.”